OTTAWA - Canada is committing to slash methane emissions from the oil and gas sector by 75 per cent as part of a global effort to curb the powerful greenhouse gas.
Canada announced it would support the Global Methane Pledge, an initiative recently launched by the United States and the European Union that aims to reduce methane emissions 30 per cent from 2020 levels by 2030 economy-wide. Because the oil and gas industry is a major source of methane emissions, Canada’s 75 per cent reduction target for the sector, compared to 2012 levels, is understood to be vital for meeting the international pledge’s target.
“This is a critical year for climate action and Canada is proud to be among the early supporters of the Global Methane Pledge, a critical initiative that will increase global action to fight climate change,” said Environment and Climate Change Minister Jonathan Wilkinson in a statement.
“Climate change is accelerating, and Canadians expect ambitious action to address it,” he added.
Canada is one of 24 countries to recently join the pledge, following its launch and initial support from Argentina, Ghana, Indonesia, Iraq, Italy, Mexico, the United Kingdom, the U.S., and the EU. The news comes ahead of major UN climate talks set to take place in Glasgow, Scotland, starting at the end of this month.
“Momentum is building for a methane moment at Glasgow. Cutting methane pollution is the fastest opportunity we have to help avert our most acute climate risks, including crop loss, wildfires, extreme weather, and rising sea levels,” said Environmental Defence Fund president Fredd Krupp in a statement.
The 75 per cent methane reduction target is referenced in the Liberals’ 2021 campaign platform and represents an extension of a previous promise to reduce methane emissions from the oil and gas sector 40 to 45 per cent below 2012 levels by 2025. Modelling shows without a change of pace, Canada is projected to hit a 29 per cent reduction of methane emissions by 2025.
Methane is a critical greenhouse gas to focus on because it breaks down faster in the atmosphere compared to carbon dioxide but is 80 times more powerful for driving the greenhouse effect. In other words, there is growing pressure to focus on methane in the short term because it will slow the pace of global warming.
The Intergovernmental Panel on Climate Change’s most recent report specifically highlighted methane as an important short-term priority for the world to keep its grip on a climate-safe future.
Pembina Institute senior analyst Jan Gorski says cutting methane emissions from the oil and gas sector 75 per cent will be critical for meeting the broader economy-wide goal of a 30 per cent reduction by 2030 compared to 2020 levels.
“Those two (targets) go hand in hand you could say, because ... oil and gas methane is one of the cheapest, most feasible opportunities to cut methane emissions,” he said.
That’s because in the oil and gas industry, methane emissions generally come from two places. One is the intentional venting, or flaring, of the gas into the atmosphere. The second is when methane leaks from things like pipes and storage tanks.
Other than reducing oil and gas production, one of the leading ways to reduce methane emissions is to install technologies that can capture the leaking methane at various points in the supply chain, like when it’s compressed into liquid form for transportation. That has a secondary effect of giving the companies more product to sell.
“There are many cases where reducing methane emissions actually makes these companies money because they're putting more gas into the pipeline, and they can sell that gas,” said Gorski.
The fact that reducing methane emissions is generally a boon to a gas company’s bottom line is a revealing detail in Ottawa’s climate plans, says Environmental Defence senior program manager Julia Levin.
“What we see in Canada is that despite the fact negative or low-cost (methane reductions) could be achieved through regulations, the federal government last year set up a $750-million emission reduction fund (that) is paying companies to reduce their methane emissions,” she said.
“These are technologies that allow companies to have less leakage and, therefore, more product they can sell,” she said. “So we're subsidizing their ability to generate more profit from their products.”
At the time the fund was announced, Natural Resources Minister Seamus O’Regan called it a way to reduce emissions while protecting the competitiveness of Canada’s oil and gas sector. Specifically, the regulations were expected to save oil and gas producers over $1 billion worth of gas between 2018 and 2035.
Gorski said an international pledge to curb methane emissions makes the competitiveness concern less relevant because other jurisdictions are moving in that direction, too.
“The biggest lever we can pull is regulations, and one of the concerns we hear is that regulations that are too stringent might reduce the competitiveness of our oil and gas sector,” he said.
“But this pledge shows that other countries are actually acting to address methane,” he added, pointing to the Environmental Protection Agency in the U.S. that is working on new rules.
Levin also said strong federal regulations will be important, but it is essential provinces like Alberta and Saskatchewan are required to meet the federal regulations instead of watered-down provincial rules.
While there are many ways to reduce methane emissions in the sector by using new technologies and increasing inspections for leaks, Levin says the elephant in the room is still oil and gas production.
“If we reduce our production of oil and gas, we'll reduce methane leakage,” she explains.
Despite a Liberal campaign promise to cap oil and gas emissions and ratchet them down over time, there is still no plan to manage a decline of the sector altogether. Instead, Ottawa is exploring ways to include the oil and gas industry in carbon capture plans and the development of a blue hydrogen sector. Blue hydrogen refers to hydrogen produced from natural gas, using carbon capture technology, and would necessitate increased natural gas extraction.
“It's what this government has done for the past six years,” said Levin.
“It's hitting the accelerator with one foot, and hitting the brake with the other.”
The World Bank is leading a global initiative to eliminate routine flaring by 2030, where it says annually about 150 billion cubic metres of methane is flared, emitting roughly 400 million tonnes of CO2 equivalent emissions. Of that, Canada is responsible for over one billion cubic metres flared each year.
